Virgin Wines sees sales tick up despite ‘subdued’ consumer landscape

Virgin Wines has reported its sales ticked up in the second half of 2023, despite a “subdued consumer economic landscape” which has weighed heavily on the sector’s bottom line over the last year.

The direct-to-consumer wine retailer said in a trading update on Monday that its total revenue rose two per cent year-on-year to £34.3m in the six months to 29 December.

Virgin Wines reported a “significant improvement in profitability”, driven by revenue growth, production cost reduction and a new warehouse system.

It said sales from repeat customers rose five per cent, while commercial revenues increased 6.5 per cent during the period.

The company’s shares have slumped 33 per cent in the last 12 months as consumers squeezed by the high cost of living scale back on their favourite brands.

It swung to a £700,000 pretax loss in the previous financial year amid rampant cost inflation and warehouse issues.

Virgin Wines said on Monday that its Ebitda, exclusing share-based payments, more than doubled year-on-year, rising 122 per cent to £0.8m to £1.75m.

“We are pleased with our performance through the first half of our financial year, particularly our strong profitability despite the challenging trading environment, with Ebitda representing over five per cent of revenue,” said chief executive Jay Wright.

“Following operational challenges last year, we made significant improvements in our warehouse operations, achieving a planned reduction in fulfilment costs, while maintaining an excellent next day delivery service throughout the busy peak trading period.”

The firm said it was still on track to meet market expectations in its full-year results.

Virgin Wine’s share rose 1.5 per cent on Monday morning following the update.